Market failure implies that
a. in the real word, the market fails to achieve equilibrium
b. with an unequal distribution of income, the market will fail to provide sufficient goods to the poor
c. when externalities are present, the market will fail to provide the socially optimal price and output
d. negative externalities are greater than positive externalities so that the market fails to create an efficient outcome
e. the inability of the market to solve the problem of unnecessary demand is caused by persuasive advertising
C
You might also like to view...
Which of the following statements about supply curves is CORRECT? I. A supply curve also can be a marginal cost curve. II. A supply curve tells the quantity of other goods and services that sellers must give up to produce another unit of the good
A) I only B) II only C) both I and II D) neither I nor II
Increased inflation _____ the value of depreciating capital assets
a. raises b. erodes c. does not affect d. creates uncertainty regarding
Farmers can produce wheat and/or rice. What will happen in the wheat market if there is an increase in demand for rice?
a. Wheat supply will increase. b. Wheat supply will decrease. c. Wheat demand will increase. d. Wheat demand will decrease. e. Wheat supply and demand will increase.
If the marginal propensity to consume is 6/7, then the multiplier is 7
a. True b. False Indicate whether the statement is true or false